Samsung plans major expansion in San Jose

Samsung, which is waging an epic battle with Apple over iPhone and iPad patents right now, made a major announcement Thursday on Apple's home turf.

The South Korean company, which employs about 340 people in its semiconductor division in San Jose, mapped out a major expansion plan, saying it wants to increase its work force to 2,000 over the next two years.

"We are now ready to prepare for the next generation by expanding our current facilities here in San Jose," said Jong Joong Kim, Samsung's president of device solutions.

It was an important announcement, but one with few details. That's because while a memorandum of understanding was signed between California's governor and one of Samsung's top executives, there are still details, such as tax credits, that need to be hammered out.

According to the company, the jobs created will be in research and development.

San Jose Mayor Chuck Reed said the announcement was more evidence of how the technology sector drives the economy. "When they do well, everyone else does well," he said.

Governor Jerry Brown said the expansion will strengthen the state's role as a world leader in innovation and gives San Jose bragging rights. "It is a red letter day here for San Jose," he said.

A source who has been involved in the negotiations said Samsung was concerned about the high cost of living in San Jose and what it would have to pay employees. It was considering other cities, including Austin, Texas, but ultimately decided to stay and expand in San Jose.